CME Group to Sue CFTC Over Perpetual Futures Approval

CME Group, the world's largest futures exchange operator, plans to sue the Commodity Futures Trading Commission (CFTC) over its recent approval of perpetual crypto futures. Outgoing CME CEO Terrence Duffy confirmed the exchange operator has been preparing the litigation for eight months, arguing that these contracts should be classified as swaps under the Dodd-Frank Act rather than futures.

Duffy contends that perpetual futures, which never expire and rely on periodic funding payments, are legally swaps due to the exchange of payments between two parties. He also suggested that rival perpetual futures would likely need to route through CME due to its exclusive licenses on key market benchmarks.

The CFTC's decision in late May to approve Kalshi's Bitcoin perpetual futures contract, and separately clear Coinbase to connect U.S. customers to offshore perps, marked the first time such instruments would be available to domestic investors on U.S.-regulated exchanges. These products can carry leverage as high as 50-to-1.

CFTC Chairman Michael Selig has defended the regulator’s decision as a means to bring one of crypto's most liquid markets onshore and has signaled a broader push to expand crypto derivatives and other products in the U.S., emphasizing collaboration with the SEC to end regulatory turf wars. A spokesperson for the CFTC stated the agency looks forward to addressing the claims and dismissing the lawsuit.